WARNING: This Digest was prepared for debate. It reflects the legislation as introduced and does not canvass subsequent amendments. This Digest does not have any official legal status. Other sources should be consulted to determine the subsequent official status of the Bill.

The Bills Digest at a glance

Purpose

The purpose of the Tax and Superannuation Laws Amendment (Increased Concessional Contributions Cap and Other Measures) Bill 2013 and the Superannuation (Sustaining the Superannuation Contribution Concession) Imposition Bill 2013 (the Bills) is to amend various taxation and superannuation laws to implement a number of budget-related announcements.

Structure

The three separate measures to be implemented by the Bills are set out in four Schedules to the Tax and Superannuation Laws Amendment (Increased Concessional Contributions Cap and Other Measures) Bill 2013. These three measures are:

– a temporary increase in the superannuation concessional contributions cap for those aged 50 or more

– amendments relating to the payment of the low income superannuation contribution (LISC)

– an increase in tax paid on concessional contributions for certain taxpayers earning more than $300 000 per year.

The Superannuation (Sustaining the Superannuation Contribution Concession) Imposition Bill 2013 fulfils the requirements of section 55 of the Constitution that a separate Bill is required to impose a tax.

Key issues

At the time of writing, the Bills have not been referred to any Parliamentary Committee. In addition, submissions to Treasury in response to public consultation on some aspects of the Bill have not been published. That being the case, only limited stakeholder input about the changes in the Bill is available.

At the time of writing, the Bills had been passed by the House of Representatives. In commenting on the Bills, the Coalition indicated that it would not oppose the Bills, ‘even though they contain a tax increase on superannuation’.

In total, the net financial impact of the measures included in the Bills on the budget bottom line is estimated to be around $580 million in additional revenue over the five years to
2016–17—which is comprised of additional estimated revenue of $1.7 billion offset by estimated additional expenditure of $1.2 billion.

The proposed measure to increase the tax paid on concessional contributions for certain taxpayers earning more than $300 000 per year is to apply for the 2012–13 income year.

– Taxpayers may be exposed to a degree of uncertainty over their tax affairs if they try to reconcile their tax liabilities for the 2012–13 financial year without this Bill having passed the Parliament. The impact on the budget may also not result if the tax law does not change as expected for the 2012–13 financial year.

Date introduced: 15 May 2013House: House of RepresentativesPortfolio: TreasuryCommencement: On Royal Assent

The purpose of the Tax and Superannuation Laws Amendment (Increased Concessional Contributions Cap and Other Measures) Bill 2013 (TSLA Bill) is to amend a number of tax and superannuation laws to implement a temporary higher concessional contributions cap for people aged 50 or more, to amend arrangements for the administration of payments of the low income superannuation contribution (LISC) by the Commissioner of Taxation and to establish an additional tax on certain superannuation contributions for higher income earners above a specified threshold.

The Superannuation (Sustaining the Superannuation Contribution Concession) Imposition Bill 2013 (SI Bill), which is a companion to the TSLA Bill, establishes the tax rate on these contributions above the specified threshold.

Schedule 1 amends the Income Tax Assessment Act 1997 (ITAA 1997) and the Income Tax (Transitional Provisions) Act 1997 (IT(TP) Act 1997) to temporarily increase the concessional contributions cap for those aged 50 or more to $35 000 from 1 July 2014, with those aged 60 or more able to access this higher cap from 1 July 2013[1]

Schedule 2 amends the Superannuation (Government Co-contribution for Low Income Earners) Act 2003 (SGCLIE 2003) to make a number of changes to the way the Commissioner of Taxation administers the LISC[2]

Schedule 3 reduces the tax concession that individuals with income above $300 000 receive on their concessional superannuation contributions from 30 per cent to 15 per cent by imposing tax under Division 293 of the ITAA 1997. It also amends the IT(TP) Act 1997, the Taxation Administration Act 1953 (TAA 1953)[3], the Superannuation (Resolution of Complaints) Act 1993[4]and a number of Acts which govern the operation of some of the Commonwealth defined benefit superannuation schemes

As required under Part 3 of the Human Rights (ParliamentaryScrutiny) Act 2011 (Cth), the Government has assessed the Bills’ compatibility with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of that Act.[9] The Government considers that the Bills are compatible.

The Parliamentary Joint Committee on Human Rights considers that the Bills are unlikely to raise human rights concerns.[10]

Schedule 1 of the TSLA Bill amends the ITAA 1997 and the IT(TP) Act 1997 to provide for a temporary higher superannuation concessional contributions cap of $35 000 for those aged 50 years or more from 1 July 2014; and from 1 July 2013 for those aged 60 or more—compared to the current cap of $25 000.

Because superannuation contributions and earnings are concessionally taxed, the rules governing the amounts that can be contributed to superannuation by individuals and employers form an important part of the cost of the superannuation system.

There are four main rules that influence the level of superannuation contributions that an individual can make each year:

a cap of $25 000 per year on contributions for which a deduction is allowed and which attract the concessional contributions tax rate of 15 per cent. Beyond this cap contributions are taxed at 31.5 per cent

a cap of six times the concessional contributions cap ($150 000) per year on contributions made on an after-tax basis

a three-year ‘bring forward’ rule which provides that individuals under the age of 65 can contribute more than the $150 000 non-concessional contributions cap in a single financial year, but over the next two years the total non-concessional contributions cannot exceed a maximum of $450 000 over the three years and

a maximum employer liability under the superannuation guarantee in 2012–13 of $45 750 per quarter (translating to an annual maximum contribution of $16 470 at a superannuation guarantee contribution rate of 9 per cent).[11]

Individuals breaching the contributions caps may be liable for excess contributions tax, which is levied at the highest marginal rate (46.5 per cent).[12]

These contribution arrangements impact on the benefit for individuals in making additional superannuation contributions, both in the year of contribution and in the accumulated balance available upon retirement. These arrangements also have the potential to affect the benefits available to individuals across different income groups and have a direct cost to the Commonwealth budget as a result of the tax concessions provided at different points in the Australian retirement income system.

Briefly, the concessional contributions cap is an annual limit on an individual’s total concessional contributions in respect of superannuation. Subsection 292-20(2) of the ITAA 1997 specifies that the concessional contributions cap for the 2012–13 and 2013–14 income years is $25 000.[14]

For the 2014–15 and later income years the increase in the cap is indexed with changes in Average Weekly Ordinary Time Earnings (AWOTE).[15] However, the cap only increases by increments of $5000.[16] For example, if the application of the indexation procedure meant that the increase in the concessional contribution cap was $31 000 for the new financial year, it would automatically be rounded down to $30 000 for that financial year.[17]

Should a person make superannuation contributions that exceed the concessional contributions cap, they may be liable for excess contributions tax at a rate of an additional 31.5 per cent over and above the 15 per cent tax normally levied on all concessional superannuation contributions.[18] A ‘non‑concessional’ contributions cap is also in place to limit additional after-tax contributions and is currently set at three times the concessional contributions cap.[19]

Why is this cap in place?

The concessional and non-concessional caps were first introduced in 2007 as part of the Howard Government’s ‘Simpler Super’ changes.[20] The caps replaced a regime that included unlimited after‑tax personal contributions and age-based concessional contribution limits of $15 260 for contributors aged under 35 years, $42 385 for a contributor aged 35–49 years and $105 113 for a contributor aged over 49 years.[21]

As part of the ‘Simpler Super’ arrangements, transitional caps were put in place in the phase down to an annual concessional contributions cap of $25 000 and non-concessional contributions cap that was six times the concessional cap (table 1). As a further transitional arrangement, a one-off non‑concessional contribution cap of $1 million applied for the period 10 May 2006 to 30 June 2007.[22]

Table 1: Superannuation contributions caps, 2007–08 to 2012–13

Concessional contributions cap

Income year

Member aged under 50

Member aged 50 or over

Non-concessional contributions cap

2007–08

$50 000

$100 000

$150 000

2008–09

$50 000

$100 000

$150 000

2009–10

$25 000

$50 000

$150 000

2010–11

$25 000

$50 000

$150 000

2011–12

$25 000

$50 000

$150 000

2012–13

$25 000

$25 000

$150 000

Source: Section 292-20 of the IT(TP) Act 1997. Sections 292-20 and 292-85 of the ITAA 1997.

The main rationale for having a higher age-based cap is that it allows individuals to ‘catch up’ on contributions to superannuation at a time when they are more likely to have higher disposable incomes.[23]

The value of the concessional contributions caps and the coverage of the higher cap have been the subject of a number of policy announcements over recent years.

2007 concessional cap arrangements

As originally implemented, the general concessional contributions cap was to be $50 000 for
2007–08 and then rise in line with changes in AWOTE in $5000 increments. As a transitional arrangement, individuals who were aged 50 or more had a concessional contributions cap of $100 000 (not indexed) for the years 2007–08 to 2011–12, from which time it would drop to $25 000 (as indexed for the relevant year).[24]

Policy changes 2009–2012

In the 2009–10 Budget, the Government announced that it would reduce the concessional contributions cap to $25 000 from the 2009–10 financial year and that the transitional concessional contributions cap (for those aged 50 and over for 2009–10, 2010–11 and 2011–12) would be reduced to $50 000.[25] This policy was enacted by the Tax Laws Amendment (2009 Budget Measures No. 1) Act 2009.[26]

In the 2010–11 Budget, the Government announced further changes to concessional contributions caps, with a higher cap of $50 000 to apply to individuals aged 50 and over with total superannuation balances below $500 000 from 1 July 2012.[27] The measure was part of a broader package of measures that were part of the Government’s response to the Henry Tax Review, including a phased increase in the superannuation guarantee from nine per cent to 12 per cent and the payment of a low income superannuation contribution.[28] These measures were to be notionally funded from the proceeds of the Resource Super Profits Tax (RSPT).[29]

The Government took this policy to the 2010 federal election, recognising that ‘many older Australians wish to make catch-up contributions to superannuation’.[30]

In February 2011, the Treasurer released a consultation paper for the policy to increase concessional contribution caps to $50 000 for those aged 50 or more with a superannuation balance of less than $500 000.[31] A number of design issues, including whether or not to include those who have commenced drawing down their superannuation, the process for assessing eligibility and the factors used to calculate the $500 000 superannuation fund balance were canvassed.[32]

In the 2011–12 Budget, the Government modified the policy announcement from the previous year so that the higher concessional contributions cap for individuals aged 50 and over with total superannuation balances below $500 000 would be set at $25 000 higher than the general cap.[33]

As part of the November 2011 Mid-Year Economic and Fiscal Outlook, the Government announced a deferral of the indexation of the general concessional contributions cap for 2013–14.[34] At the time, the Government expected the general cap to increase to $30 000 in 2014–15. This measure was implemented by the Tax and Superannuation Laws Amendment (2012 Measures No. 1) Act 2012.[35]

In the 2012–13 Budget, the Government announced a deferral of the higher cap for individuals aged 50 and over with total superannuation balances below $500 000 from 1 July 2012 to 1 July 2014.[36] In making this announcement, the Government noted the superannuation industry had raised concerns in relation to the cost and complexity involved in administering the balance limit.[37] The Government also stated that ‘deferring the start date of the higher cap to 1 July 2014 will bring significant synergies and efficiencies, as it will allow implementation to occur in conjunction with changes to superannuation fund reporting and systems that will be occurring under the SuperStream reforms’.[38]

April 2013 policy announcement

Schedule 1 to the TSLA Bill implements the policy announced by the Government on 5 April 2013, of a higher fixed concessional contributions cap of $35 000 for those aged 60 or more from 1 July 2013 and for those aged 50 or more from 1 July 2014.[39] In making this announcement—which was part of broader superannuation changes—the Government noted that it had ‘decided not to limit the new higher cap to individuals with superannuation balances below $500 000 in light of feedback from the superannuation sector that this requirement would be difficult to administer’.[40]

Draft legislation was made available by the Treasury on 7 May 2013, with submissions to close on 13 May 2013.[41] A summary of submissions prepared by Treasury noted that the legislation was broadly supported with no major concerns being raised.[42] As a result, the TSLA Bill is in equivalent terms to those of the draft legislation.[43]

The Coalition opposed the original policy of a higher cap of $50 000 for those aged 50 or more with a superannuation balance of less than $500 000 at the 2010 federal election due to its inclusion of one of the measures notionally funded by the minerals resource rent tax (MRRT).[44]

However, when the policy for a $35 000 cap for those aged 50 or more was announced on 5 April 2013, the Coalition was reported as supporting the measure.[45]

At the time of writing this Bills Digest, the Bills had passed the House of Representatives. In commenting on the Bills, the Coalition indicated that it would not oppose them, ‘even though they contain a tax increase on superannuation’.[46]

Most superannuation industry interest groups—the Australian Institute of Superannuation Trustees (AIST), SMSF Professionals’ Association of Australia (SPAA), the Financial Services Council (FSC) and the Association of Superannuation Funds of Australia (ASFA)—support the announcement of the higher $35,000 cap for those aged 50 or more.[47] SPAA noted that:

We advocated an increase in concessional contributions after the cap was reduced in the 2009 Federal budget, knowing how important it is for people nearing the end of their working lives and wanting an adequate sum in retirement.

So the increase to $35,000 is a step in the right direction. In particular, it will give women and those with broken work patterns the opportunity to contribute more at a time when they are able to and build a more dignified and self-sufficient retirement.[48]

However, most of these groups would generally like to see a higher cap in place, with a $50 000 cap nominated by the AIST as its preferred level.[49]

National Seniors Australia welcomes the $10 000 increase in the concessional contributions caps, but noted that it was ‘$15 000 short of the $50 000 cap average earners had counted on last year and the government had promised for 2014’.[50]

The Explanatory Memorandum notes that the increase in the concessional contributions cap to $35 000 for those aged 50 or more from 1 July 2014 (and from 1 July 2013 for those aged 60 or more) is estimated to cost $1.2 billion over the four years to 2016–17 (table 2).

The costs presented in the Explanatory Memorandum represent the impact on the budget of the proposed measure. The financial impact of the measure as disclosed in the 2013–14 Budget Papers relates to the impact of the policy change in moving from a cap that is $25 000 above the general cap for those aged 50 or more with a superannuation balance of less than $500 000 from 1 July 2014 to having a $35 000 cap for all individuals aged 50 or more from 1 July 2014 (with a one-year head start for those aged 60 or more).[51]

Item 2of Schedule 1 of the TSLA Bill amends the IT(TP) Act 1997 to provide for a concessional contributions cap of $35 000 for those aged 59 or over from 1 July 2013 for the 2013–14 income year and for those aged 49 or over on, or before, 30 June 2014 for the 2014–15 financial year. This is higher than the $25 000 general cap that is scheduled to apply for 2013–14.[52]

Under proposed subsection 292-20, the $35 000 cap is not indexed and remains at $35 000 until the general cap increases by way of indexation to AWOTE to $35 000. Further, the non-concessional cap will remain at six times the general cap.

A comparison of the proposed arrangements with the arrangements that were established in 2007 and the alternative of a $50 000 cap for those aged 50 and over with a superannuation account balance of $500 000 shows that the policy announced in the 2010–11 Budget (and modified in the 2011–12 Budget) would have provided the highest caps from 1 July 2014 (figure 1). The cap would also be higher by July 2018 under the original indexation parameters.

Figure 1: Concessional contributions caps under various scenarios, July 2007 to July 2018

Source: Parliamentary Library estimates based on the schedule for concessional contributions caps as outlined in section 292-20 of the IT(TP) Act 1997 and section 960-285 of the ITAA 1997 as amended by the Tax Laws Amendment (Simplified Superannuation) Act 2007: The text of the Act can be viewed at: http://www.comlaw.gov.au/Details/C2007A00009 and indexation based on changes to average weekly ordinary times earnings for adults in the November indexes from: Australian Bureau of Statistics (ABS), Average weekly earnings, Australia, Nov 2012, cat no. 6302.0, ABS, Canberra, 21 February 2013, table 10G, Average weekly earnings, industry, Australia (dollars) - original - persons, full time adult ordinary time earnings, viewed 12 June 2013, http://www.abs.gov.au/AUSSTATS/abs@.nsf/DetailsPage/6302.0Nov%202012?OpenDocument

In terms of the number of people who are eligible for the higher cap under alternative proposals:

around 363 000 people aged 50 or more are expected to benefit from the $35 000 cap from 1 July 2014

around 275 000 people aged 50 or more with a superannuation balance of less than $500 000 were expected to benefit from the $50 000 cap from 1 July 2012.[53]

The increase in the concessional contributions cap to $35 000 for those aged 50 or more from 1 July 2014 (and from 1 July 2013 for those aged 60 or more) as proposed by Schedule 1 of the TSLA Bill provides for a less generous aged-based cap than would have applied under the original proposal by the Government in the 2010–11 Budget. However, the lower cap is offset by a broader application of the measure that is not limited by reference to an individual’s superannuation balance, providing a benefit to around 32 per cent more people.

As noted previously, a number of superannuation industry groups support a higher concessional contributions cap for those aged 50 or more. In submissions to the Treasury on the draft legislation, a number of alternative arrangements relating to the higher cap were proposed including:

applying the ‘bring forward rule’ to concessional contributions so that those under 65 could bring two years of contributions into a single year.[57]

ASFA has recently proposed that contribution caps be administered on a lifetime basis rather than an annual basis.[58] If caps were to be applied on an annual basis, ASFA considers that ‘they should be set at levels which allow individuals to accrue a reasonable level of savings for retirement, recognising that individuals generally will make contributions below the caps in most years’ and provisions should also be in place to allow individuals with low balances to catch up when they have the financial capacity to do so.[59]

While the Government ignored many of the Henry Tax Review’s recommendations in relation to superannuation—particularly the recommendation not to increase the rate of the superannuation guarantee from nine per cent—the Review included a recommendation that the annual cap on concessionally taxed contributions for those aged 50 or more be double that of a general cap of $25 000 (indexed).[60] In advocating for the higher cap, the Henry Review noted:

… many people who have extended periods outside the workforce, such as carers and middle-aged migrants, may not have had the ability to make concessional contributions over a full working life. These people should be able to make additional concessional contributions when they have the capacity to do so.[61]

For most Australians in accumulation-style superannuation schemes—where final retirement benefits are directly related to contributions by an individual (or their employer)—retirement outcomes are largely associated with employment patterns and remuneration over a working life. Women, by virtue of average lower earnings, fewer years in paid employment, childcare and caring responsibilities generally have significantly lower average superannuation balances upon retirement.[62]

Data reported by ASFA show that while superannuation balances for women have increased in recent years, on average women have more than 40 per cent less superannuation than men, with a median balance 35 per cent lower than that for men (figure 2).

Figure 2: Superannuation coverage and superannuation holdings of men and women who were not yet retired, by annual wage and salary income, 2006 and 2010

a superannuation component (linked to weekly earnings) to the Government-funded parental leave scheme and

a return-to-work super bonus for women who have spent time out of the workforce to raise children.[63]

A higher concessional contributions cap has also been part of the suggested measures to address this issue. In supporting a higher concessional cap, Women in Super note that:

We acknowledge the need to address inequities in the superannuation system, such as generous tax concessions for high income earners, but also recognise that many women will not be in a position to contribute significantly to their superannuation until later in their working lives. It is well established that women retire with up to 50% less superannuation savings than men, yet have longer life expectancies and therefore need their savings to last longer.

Given that, in many cases, women are not able to make voluntary contributions to their superannuation until later in their careers, and women (and men) retiring over the next decade or so will not have had the full benefit of a working lifetime of nine per cent SG, our preferred position remains that there should be a $50,000 concessional contributions cap for those over 50. We believe this would be an effective measure in allowing women to catch up and in part compensate for career breaks often taken to raise children or care for family members.[64]

The LISC is a superannuation contribution of up to $500 to low income earners by government. To be eligible for the LISC, individuals must have an ‘adjusted taxable income’ of less than $37 000 and derive 10 per cent or more of their total income from business or employment.[65] The maximum contribution of $500 is based on the contributions tax that would be paid (at a rate of 15 per cent) on the Superannuation Guarantee payment for an employee with a taxable income of $37 000.[66] A minimum payment threshold of $20 applies.

Low income earners do not need to make a personal contribution to qualify for a payment, with a range of payments made on their behalf, including payments made under the Superannuation Guarantee, qualifying them for the payment.[67] Further, there is no requirement for an individual to be proactive in claiming the payment, with the Commissioner of Taxation given the power to determine eligibility based on information available to the Australian Taxation Office.[68]

The LISC was first announced by the Government as part of its response to the Henry Tax Review in May 2010.[69] The measure was one of several superannuation-related changes announced at the time, the others included an increase in the rate of the Superannuation Guarantee from nine to 12 per cent and increasing the maximum Superannuation Guarantee contribution age from 70 to 75.[70]

Importantly, the LISC and these related superannuation measures were to be linked to the proposed Resources Super Profits Tax.[71]

In November 2011, the Government announced a modification of the eligibility rules for the LISC so that individuals who receive less than 10 per cent of their income through employment or business will not be eligible for the government low income superannuation contribution (consistent with the requirements for the low income Government superannuation co-contribution).[72] Another adjustment was that the LISC will not be paid if it would be less than $20 in order to reduce administration costs, or where the individual is a temporary resident.[73]

The LISC was implemented by the Tax Laws Amendment (Stronger, Fairer, Simpler and Other Measures) Act 2012, which came into effect from 29 March 2012.[74] The first payments—which apply for the 2012–13 income year—will be made after June 2013 but could take up to 14 months after the end of the financial year depending on whether a person lodges a tax return.[75]

The Explanatory Memorandum notes that the measures proposed by Schedule 2 of the TSLA Bill were announced in part by the Minister for Financial Services and Superannuation on 29 November 2011.[76] The technical changes included in Schedule 2 that go further than those announced by the Minister include the removal of the $20 minimum payment threshold and introducing quarterly and annual Parliamentary reporting requirements.[77]

The removal of the $20 minimum payment threshold was announced as part of the 2013–14 Budget.[78]

The Coalition does not support the LISC, primarily on the basis that it is notionally funded by the minerals resource rent tax (MRRT) and has indicated that it would be discontinued under a Coalition Government.[79] When the Bill implementing the LISC was considered in the Parliament, the Coalition voted against the proposal in both Houses.[80]

In relation to the amendments contained in Schedule 2 of the TSLA Bill, the Coalition noted that:

The coalition have opposed the low-income super contribution because it is one of the many measures linked to the government's failed mining tax. The mining tax, which was going to bring in all these billions of dollars to pay for measures like this, has not brought in any of the money to any extent, as I outlined earlier, yet the government has persisted with them. It is unaffordable in the current budgetary situation. However, given these are technical amendments, they will not be opposed by the coalition.[81]

Superannuation industry interest groups broadly support the LISC.[82] However, none of these groups appears to have commented on the changes proposed to the LISC by Schedule 2 of the TSLA Bill to date.

The Explanatory Memorandum notes that the financial impact of Schedule 2 of the TSLA Bill is $1 million for each year over the forward estimates.[83] This is a relatively minor amount compared to the most recent estimates for the scheme of average annual payments of around $965 million to 2016–17.[84]

The 2013–14 Budget included the expense measure ‘Low Income Superannuation Contribution—technical amendment’.[85] However, this measure only related to the payment of entitlements below $20 and was estimated to cost $3 million each year for a total cost over the five years to 2016–17 of $15 million.[86] This suggests that the other amendments included in Schedule 2 provide a revenue gain of $2 million per year for each year over the forward estimates.

The Australian Taxation Office (ATO) is responsible for administering the LISC. In the 2010–11 Budget, the ATO received around $46 million over the four years to 2013–14 to administer the LISC, with additional capital of $10.7 million also allocated.[87]

Under existing arrangements, the Commissioner of Taxation determines eligibility for the LISC based on whether the individual:

has concessional contributions for the relevant income year

has an adjusted taxable income (ATI) is $37 000 or less

in not a holder of a temporary resident visa and

satisfies an income test that at least ten per cent of their ‘total income’ is derived from business or employment.[88]

A taxpayer is not required to lodge a tax return in order to be eligible for payment of the LISC.[89] However the problem arises that the Commissioner of Taxation could breach his or her obligations under the Financial Management and Accountability Act 1997[90]unless there was a specific provision permitting the Commissioner to estimate entitlement to the LISC as a basis for making the payment.[91]

Section 12C of the SGCLIE 2003 sets out which persons are entitled to a low income superannuation contribution. Item 7 of Schedule 2 of the TSLA Bill inserts proposed subsections 12C(2)–(5) into the SGCLIE 2003 toprovide for an estimations process to occur. Key features of the process are that:

it is only triggered if, after 12 months following the relevant financial year, the Commissioner reasonably believes there is insufficient information to make a determination to pay the LISC: proposed paragraph 12C(2)(b) and

an assessment of the ATI of the individual (using a standard total deduction of $300 for the individual) and an estimation of whether ten per cent of eligible income was attributable to work-related activities (which does not require that the income was earned in the year that the contribution was made: proposed paragraph 12C(2)(c)).

If, after making a determination using the estimations process, the Commissioner of Taxation obtains information, which if known at the time that the determination to pay an LISC was made, the determination would not have been made, proposed section 12F provides a mechanism for the Commissioner to make necessary adjustments to the payment, including recovering overpayments under existing section 24 of the SGCLIE 2003.[92]

The Explanatory Memorandum notes that there is some ambiguity in the types of contributions—contributions from reserves and notional tax contributions—that are eligible for calculating the LISC.[93] This is due to the reference in paragraph 12C(a) that superannuation contributions covered by section 12D are made during the income year by or for the person.

According to the Explanatory Memorandum:

The key ambiguity with this terminology stems from allocations from reserves being made to the superannuation fund in one year but allocated in another year. Also, some allocations may not necessarily come from ‘contributions’. Additionally, notional taxed contributions may not be based on actual ‘contributions’ ‘made’ to a fund.[94]

In order to clarify the position, item 6 of Schedule 2 of the TSLA Billrepeals and replaces paragraph12C(a)[95]so that concessional contributions are used to determine eligibility.[96]Item 8 of Schedule 2 of the TSLA Bill repeals section 12D, which also uses the term ‘contributions made by, or for’.

In the original design of the LISC measure, a Treasury consultation paper noted that it was not intended that contributions from reserves and notional tax contributions were to be eligible for the LISC.[97]

However, when the LISC legislation was introduced into the Parliament in November 2011, the Explanatory Memorandum for the originating Bill stated that these types of contributions would be included through the use of the term concessional contributions as the type of payments that were eligible for a LISC. That term, which is defined in the ITAA 1997, includes notional taxed contributions and allocations from reserves that are concessional contributions.[98]

Under paragraph 12E(2)(c) of the of the SGCLIE 2003, no amount of LISC is paid if the amount payable is less than $20. Item 11 of Schedule 2 of the TSLA Bill repeals and replaces paragraph 12E(2)(c) so that if the calculated amount is less than $10 then a minimum payment of $10 applies.

When the LISC legislation was introduced in the Parliament in November 2011, the Government noted that the estimated coverage of the measure was 3.6 million people, including around 2.1 million women.[99]

In November 2011, when the policy was modified to include a $20 minimum contribution (below which no contribution is paid) and the ability for the LISC to be paid even when no annual tax return is lodged, the Minister noted that net coverage would increase by 100 000.[100] However, the Minister also noted that the number of people covered was unchanged at around 3.6 million low income earners, including 2.1 million women.[101]

In introducing this Bill, the Minister re-stated that coverage was estimated to be 3.6 million low income earners including 2.1 million women.[102] In a more recent media release, the Minister noted that the overall number of people eligible remained the same (3.6 million), but that the number of women who would benefit from the LSIC was higher at 2.2 million.[103]

It could be expected that the lowering of the minimum calculation threshold from $20 to $0 (with a minimum payment of $10) would of itself increase coverage of the LISC.

Under current arrangements, over- and under-payments of the LISC are subject to the same arrangements as apply to the superannuation co-contribution as set out in sections 23 and 24 of the of the SGCLIE 2003. Item 12of Schedule 2 inserts proposed subsections 12E(3) and (4) into the SGCLIE 2003toprovide LISC‑specific arrangements relating to over- and under-payments of the LISC by the Commissioner of Taxation that do not require amounts that are less than $10 to be recovered or paid.

Proposed section 12G inserted by item 13of Schedule 2 of the TSLA Bill provides that the Commissioner of Taxation must provide the Minister with a report, after the end of each quarter and after the end of each financial year, for presentation in Parliament. The report must include the prescribed details about beneficiaries of, and amounts of, low income superannuation contributions.

Such a reporting arrangement is similar to that applying to the superannuation co-contributions as set out in section 54 of the SGCLIE 2003 and will facilitate the availability of public information on the operation of the LISC. The Explanatory Memorandum notes that the ‘prescribed details’ are to be set in regulations.[104] Under the existing regulations as they apply to section 54 of the SGCLIE 2003, prescribed details include the number of recipients and amount of contributions. Detailed ranges for income and taxable income are also included.[105] In addition to being tabled in Parliament, these reports are published on the ATO website.[106]

Schedules 3 and 4 of the TSLA Bill amend the ITAA 1997 and a number of other tax and superannuation laws so that, in general, individuals with annual income above $300 000 receive a lower tax concession (15 per cent) than under previous arrangements (30 per cent).

Under current arrangements, superannuation contributions up to a certain limit are generally concessionally taxed using a fixed 15 per cent tax. The tax concession for individual taxpayers therefore varies depending on each taxpayer’s marginal tax rate (table 3). Taxpayers with taxable income of more than $180 000 therefore obtain the largest value from this fixed rate tax concession.

Note: Taxable income is defined in section 4-15 of the ITAA 1997 and includes income such as salaries, wages, rents and interest less expenditure incurred in earning that income (such as travel expenses and union dues) and other personal deductions (such as gifts to approved entities).

The changes proposed by Schedules 3 and 4 of the TSLA Bill were announced as part of the 2012–13 Budget in May 2012. The Government noted that the measure was estimated to affect around 128 000 people in 2012–13 (1.2 per cent of people contributing to superannuation) and was estimated to provide savings to the budget of $946 million over the four years to 2015–16.[107] Under this original proposal, the measure of income to be used for determining the $300 000 threshold included taxable income, concessional superannuation contributions, adjusted fringe benefits, total net investment loss, target foreign income, tax-free government pensions and benefits, less child support.[108]

On 12 May 2012, the Government was reported as clarifying that coverage of the measure would extend to all workers earning more than $300 000, including Federal politicians and Commonwealth public servants.[109]

In the 2013–14 Budget, the Government announced three specific changes to the proposed measure:

exempting employer contributions for Federal judges sitting on or after 1 July 2012 who are entitled to a benefit payable under the Judges’ Pension Act 1968,[110] and employer contributions made to constitutionally protected funds for State higher-level office holders sitting on or after 1 July 2012

using a similar definition of income for the measure to that used for calculating whether an individual is liable to pay the Medicare levy surcharge and

refunding former temporary residents the tax paid under the measure.[111]

The net impact of these changes was to provide an estimated revenue gain of $25.2 million over the four years to 2016–17.[112]

On 1 May 2013, the Government released draft legislation for the proposed measure, with submissions due by 8 May 2013.[113] At the time of writing this Bills Digest, Treasury had not yet made these submissions publicly available.[114]

On 31 May 2013, the Government released draft regulations that support the increased tax measure.[115] Submissions to the draft regulations closed on 6 June 2013.[116] At the time of writing, Treasury had not yet made these submissions publicly available.[117]

At the time of writing this Bills Digest, the Bills had passed the House of Representatives. In relation to Schedules 3 and 4 of the TSLA Bill, the Coalition commented that:

Whilst the coalition would in normal circumstances be opposed to yet another tax increase by Labor, as the Leader of the Opposition outlined in his budget reply speech, given the state of the budget the coalition will not oppose this schedule.[118]

At the time the measure was announced, the superannuation industry did not support the proposed changes.[119] The ASFA considered that:

… superannuation tax concessions must be set with a long-term view of ensuring better retirement incomes for ageing Australians … making small changes at the edges to gain revenue for short-term political gain does not contribute to the development of long-term sustainable retirement incomes policy.[120]

The Financial Services Council, representing for-profit superannuation funds, considered that the changes undermine retirement planning and that the Government had ‘confirmed that it is willing to use retirement savings to pay for other political objectives’.[121]

In relation to the more detailed arrangements which exempt some superannuation contributions for Federal judges and certain state government officials, ASFA considers that it is unfair that judges and state public servants were exempted from the proposed arrangements. ASFA noted that ‘[a]ny system must be a universal system. Any change to the system needs to ensure it can be applied fairly’.[122]

The key threshold at which the tax applies is when an individual’s income (as assessed for Medicare levy surcharge purposes) plus certain superannuation contributions exceeds $300 000. In general, a tax of 15 per cent will be applied to amounts above the $300 000 threshold irrespective of the type of superannuation fund(s) that an individual holds. Some exceptions to this general principle are some superannuation payments for Commonwealth judges, certain State government officials and temporary residents departing Australia.

Part 1 of Schedule 3 of the TSLA Bill makes a number of amendments to the ITAA 1997 and the TAA 1953 to reduce the tax concession on certain superannuation contributions for individuals earning more than $300 000. Specific rules are established for defined benefit superannuation schemes and to modify arrangements relating to constitutionally protected State higher-level office holders, Commonwealth judges and temporary residents who depart Australia.

The SI Bill imposes a tax of 15 per cent on taxable contributions which are defined in proposed section 293-20 of the ITAA 1997 (included in item 1 of Schedule 3 of the TSLA Bill). Where the combination of a person’s income for surcharge purposes and the low tax contributions for the relevant income year exceeds $300,000, the taxable contributions for that income year are the lesser of the low tax contributions and the amount of the excess. Income for surcharge purposes is already defined in the ITAA 1997.[124] (Further information about the imposition of the tax is below.)

The term low tax contributions is defined in proposed sections 293-25 and 293-30, incorporating certain existing types of superannuation contributions and excluding others. In general, the definition of low tax contributions incorporates those concessionally taxed superannuation payments made for an individual to a superannuation account for the individual.

Proposed section 293-65 of the ITAA 1997provides that the proposed tax becomes due and payable 21 days after the Commissioner of Taxation issues a notice of assessment of liability for the tax. However, separate arrangements are established for tax liabilities that arise in relation to defined benefits schemes (see below).

Specific arrangements are established for members of certain types of superannuation schemes. Some types of people are also specifically exempted from the application of the proposed measure.

Members of defined benefit superannuation schemes

The application of the proposed 15 per cent tax is relatively straightforward for an individual in an accumulation superannuation fund, whose annual earnings and superannuation payments are transparent.

However, for defined benefit schemes—where benefits are set independently to the level of an individual’s contributions—special rules are required to determine the ‘value’ of certain annual superannuation contributions so that the $300 000 threshold can be applied.

Proposed section 293-115 of the ITAA 1997 provides that the meaning of the term defined benefit contributions, and the method of determining the amount of the defined benefit contributions are to be set out in regulations. Draft regulations were issued by the Government on 31 May 2013.[125] Any legislative instrument which is made under proposed subsection 293-115(1) of the ITAA 1997 must be tabled in each House within six sitting days following registration on the Federal Register of Legislative Instruments.[126] Unless laid before each House within this time limit, the legislative instrument will cease to have effect.[127] As the legislative instrument is a disallowable instrument a Senator or Member of the House of Representatives may move a motion of disallowance within 15 sitting days of the day that it is tabled. The motion to disallow must be resolved or withdrawn within a further 15 sitting days of the day that the notice of motion is given. However, it should be noted that if there is no notice of motion to disallow the legislative instrument, then there is no debate about its contents.[128]

Item 2 of Schedule 3 of the TSLA Bill inserts proposed Part 3-20 into the TAA 1953. Where tax is to be paid for members of defined benefit schemes, proposed Part 3-20 of the TAA 1953 establishes a payment regime that defers payment of the tax until a superannuation benefit is paid, with specific arrangements that create a ‘debt account’ that will accrue interest at the long term bond rate for each financial year over which such a debt accrues.

As noted in the Explanatory Memorandum, the Constitution prevents the Commonwealth from imposing tax on certain superannuation contributions in relation to certain State higher-level office holders and Commonwealth judges. As a result, some superannuation payments are exempted from the proposed tax.

Constitutionally protected State higher level office holders

Constitutionally protected funds are untaxed superannuation funds that do not pay income tax on contributions or earnings they receive. Constitutionally protected funds are listed in Schedule 4 of the Income Tax Assessment Regulations 1997 and generally cover superannuation schemes for state judges.[129]

Proposed subdivision 293-E of the ITAA 1997 modifies the eligibility of members of constitutionally protected funds (or individuals declared by regulation to be affected) so that only those contributions that are salary packaged contributions are included as amounts that are subject to the 15 per cent tax.[130] However, notional defined benefits contributions are to be included in the calculation of whether the $300 000 threshold is exceeded.[131]

Under the draft regulations released by the Government, the following individuals are proposed to be declared as constitutionally protected state higher level office holders:

a Minister of the Government of a state

a member of the staff of a Minister of the Government of a state

the Governor of a state

a member of staff of the Governor of a state

a member of the Parliament of a state

the Clerk of a house of the Parliament of a state

the head of a Department of the Public Service of a state or a statutory office holder of equivalent seniority, including a statutory office holder who is the head of an instrumentality or agency of a state and

The justification for excluding these higher level office holders is based on two decisions by the High Court that found the Commonwealth could not impose an additional tax on contributions—that is, the superannuation surcharge—on contributions or notional contributions made by state Government bodies to constitutionally protected funds on behalf of state office holders at the highest levels of Government.[133]

Commonwealth judges

Pensions for federal judges are established by the Judges’ Pensions Act 1968, which covers judges in a number of Commonwealth jurisdictions including:

Justices of the High Court

Judges of the Federal Court (other than the Federal Magistrates Court or the Australian Military Court)

Judges of the Family Court (including the Family Court of Western Australia) and

persons who, under an Act, have the same status of a Justice, or a Judge, being:

Proposed subdivision 293-F of the ITAA 1997 modifies the eligibility of Commonwealth judges (including Justices of the High Court) so that defined benefit contributions under the Judges’ Pension Act 1997 are excluded from the 15 per cent tax which proposed Division 293 creates. However, such amounts are to be included in the calculation of whether the $300 000 threshold is exceeded.[135]

The justification for exempting the defined benefit contributions of Commonwealth justices and judges is that imposing the proposed tax on contributions may in some cases breach section 72(iii) of the Constitution, which provides that the remuneration of justices of the High Court, and justices and judges of other courts created by the Parliament will be fixed by the Parliament and this remuneration ‘shall not be diminished whilst they are in office’.[136]

Temporary residents who depart Australia

Under current arrangements, certain temporary residents departing Australia are able to withdraw their superannuation balances when they leave or have left Australia.[137] When withdrawn, the payment (defined as a ‘departing Australia superannuation payment’ (DASP)) is taxed at various rates depending on the components of the superannuation benefit.[138]

Proposed subdivision 293-G of the ITAA provides for a refund of the additional 15 per cent tax paid under the proposed measure for temporary residents who depart Australia. If the person is an Australian resident for a period then the additional tax would apply.

The justification for exempting temporary residents who depart Australia from the proposed measure is that any concessional tax treatment of their superannuation contributions is removed by a final withholding tax on DASPs.[139]

Inclusion of Members of Parliament, certain Commonwealth public servants and the Governor-General

Members of the Commonwealth Parliament, Commonwealth public servants that are members of defined benefits schemes and the Governor-General are covered by the proposed measure by virtue of the fact that they are not listed as being specifically excluded. In order to facilitate payment of the tax from the defined benefits schemes that cover these groups, Schedule 4 of the TSLA Bill allows individuals to make a request of their superannuation scheme to meet their accrued liability for the proposed tax when their superannuation benefit becomes payable. Schemes covered by this requirement include those established by:

the Governor-General Act 1974

the Parliamentary Contributory Superannuation Act 1948 (closed to new members from 9 October 2004)

the Superannuation Act 1976 (closed to new members from 1 July 1990) and

the Superannuation Act 1990 (closed to new members from 30 June 2005).

The need for reduced tax concession for the superannuation contributions of those earning more than $300 000 is based on the Government’s view that such a measure will ‘improve fairness’ or ‘make the system fairer’ whilst also being necessary to ‘sustain’ such a tax concession.[140]

References to these terms are also prevalent in the promotion of a number of superannuation measures in recent years including:

the LISC

contributions caps reductions and deferral of indexation increases and

higher tax on earnings as announced on 5 April 2013.

However, the terms ‘fair’ and ‘sustainability’ are subjective. Recent discussions about the fairness and sustainability of superannuation tax concessions are generally couched with reference to two specific documents prepared by the Treasury:

the estimated value of superannuation tax concessions to the budget and

information about the distribution of superannuation tax concessions across different income groups.

Value of superannuation tax concessions

In its most recent annual statement about the value of various tax concessions, the Treasury estimated that based on the policy settings at the time (January 2013), the value of tax concessions for superannuation in 2012–13 was almost $32 billion, a decrease on the $39 billion estimated for 2007–08 (figure 3).[141]

Treasury’s projections are for measured superannuation tax expenditures to increase by 40 per cent over the period 2012–13 to 2015–16, with most of this increase attributed to the tax concessions on fund earnings (60 per cent of the increase) and concessional contributions (30 per cent of the increase).[142]

Distribution of superannuation tax concessions across income groups

Treasury analysis of superannuation policy settings in place prior to the 2012–13 Budget found that the top ten per cent of income earners accounted for almost 32 per cent of total superannuation contribution concessions, with the top five per cent accounting for over 20 per cent (figure 4).

The Treasury modelling also examined the change in the distribution of superannuation contribution tax concessions across different marginal tax rates since 2007. Treasury concluded that there had been an increase in concessions for low income earners from the low income superannuation contribution and that concessions for higher income earners decreased after the reduction in the contribution caps (figure 5).

Figure 5: Change in distribution of contribution concessions since 2007

Criticisms of the sustainability and fairness argument

Criticisms of superannuation policies to address ‘fairness’ and ‘sustainability’ have a number of threads. These include the over estimation by the Treasury of the value of tax concessions, ignoring the offsetting benefits of lower age pension expenditures and an over emphasis on an ageing population. These are discussed further below.

Measuring the value of superannuation tax expenditures

A key criticism relates to the technical measurement of the value of tax expenditures. The method preferred by the Treasury to estimate superannuation tax concessions—which estimate expenditures based on the revenue foregone as contributions and earnings being taxed as income in the hands of the taxpayer—gives an estimate of $30.3 billion for tax concessions on employer contributions and fund earnings combined.[143] This is significantly higher than an alternative measure that is based on the revenue gained from removing the tax expenditures ($23.4 billion).[144]

The ASFA has long argued that the measure preferred by the Treasury overstates the value of superannuation tax expenditures, possibly by around 50 per cent.[145] ASFA notes that:

It is difficult to test the various tax expenditures estimates produced by the Treasury for superannuation as they make considerable use of unpublished estimates and projections produced by the ATO. As well, while the high-level approach in calculating the estimates is described, there is little or no description of the details and assumptions that are applied.

However, examining the pattern of the estimates (including in regard to inter-related components of the estimates) and making use of historical ATO and other data, raises a number of questions about the estimates. In particular, the assumptions adopted appear to have generated estimates that are higher than they should be even if it were accepted that the high level conceptual approach being adopted by the Treasury is valid.[146]

A narrow definition of equity?

There are a number of dimensions to equity. While the current argument is often couched in terms of the distribution of tax concessions at a specific point in time, other dimensions and factors are also relevant in considerations of equity. These include:

whether other government assistance such as the age pension should also be considered and

whether other aspects of equity such as vertical and horizontal equity—so that people in similar positions should be treated equally and people should pay taxes or receive government benefits according to their ability to pay—and impacts on intergenerational equity by treating individuals differently depending on when they were born, should also be considered.[147]

Population ageing and sustainability

The ageing population in Australia—whereby a higher proportion of the population are represented in older age groups—has been cited as a concern to government expenditures in a range of social and tax areas over the past decade.[148]

Support to the superannuation system has a direct link to other government expenditures. The latest Intergenerational Report, completed in 2010, noted that the decline in projections of age‑related spending included a decline in the proportion of pensioners receiving the full age pension ‘because of the increased value of individuals’ superannuation and other private assets and income’.[149]

However, just because superannuation tax expenditures are increasing in absolute terms, or even as a share of GDP, does not necessarily mean that they are unsustainable. ASFA notes that the argument is about the ‘political sustainability’ of superannuation tax concessions rather than sustainability of public finances:

Improving retirement income also helps take pressure off governments to fund other age-related expenses. For example, without superannuation very few retirees would be able to afford private health insurance or fund various in-home care expenses. It is these other areas budget expenditure such as health, aged care and pensions which are projected to grow substantially over the next few decades, when compared to age pension expenditures and tax concessions for super.

... [I]t’s clear that the sustainability of tax concessions for super is more about their political sustainability than anything to do with the economics or public finance.[150]

Due to requirements of section 55 of the Constitution, the tax on superannuation contributions for those above the $300 000 threshold is imposed by a separate Bill.[151] The SI Bill fulfils this Constitutional requirement.

Item 5 of the SI Bill imposes a 15 per cent rate of tax of a person’s taxable contributions for the relevant income year. The term taxable contributions is defined in the TSLA Bill.

Members, Senators and Parliamentary staff can obtain further information from the Parliamentary Library on (02) 6277 2500.

[11]. This ‘maximum contribution base’ would equate to an annual salary of $183 000 and require employer contributions under the superannuation guarantee of $16 470 (based on a nine per cent contribution rate).

[12]. Excess concessional contributions are also counted as non-concessional contributions. This means that in some cases, breaches of the caps can be taxed at 93 per cent. As part of the Government’s 5 April 2013 superannuation announcements, individuals will be able to withdraw any excess concessional contributions made from 1 July 2013 and excess concessional contributions will be taxed at the individual’s marginal tax rate, plus an interest charge. See W Swan (Treasurer) and B Shorten (Minister for Financial Services and Superannuation), Reforms to make the superannuation system fairer, joint media release, 5 April 2013, viewed 28 May 2013, http://parlinfo.aph.gov.au/parlInfo/search/display/display.w3p;query=Id%3A%22media%2Fpressrel%2F2349570%22

[13]. Most superannuation funds are accumulation funds, where the benefit is made up of the individual’s contributions plus associated investment gains/losses. A defined benefit superannuation fund is one where the benefit is calculated on some other basis, usually a formula involving years of service and salary at the time of retirement.

[20]. The Simpler Super superannuation changes were announced as part of the 2006–07 Budget. Some of the proposed changes included the introduction of tax-free superannuation pension for people aged 60 or more. Further information is available from Treasury, Continuing tax reform: statement by the Honourable Peter Costello MP, 9 May 2006, accessed 12 June 2013, pp. 17–20, http://www.budget.gov.au/2006-07/ministerial/download/treasury.pdf

[88]. These provisions are set out in sections 6 and 12C of the SGCLIE 2003. ‘Total income’ is defined in section 8 of the Act and is the sum of the person’s assessable income, their reportable fringe benefits and their reportable employer superannuation contributions (within the meaning of the ITAA 1997) for the income year. ‘Adjusted taxable income’ is established under Schedule 3 of the A New Tax System (Family Assistance) Act 1999 and includes the individual's taxable income for that year, the individual's adjusted fringe benefits total for that year, the individual's target foreign income for that year, the individual's total net investment loss (within the meaning of the ITAA 1997) for that year and the individual's tax free pension or benefit for that year.

[95]. Which will be paragraph 12C(1)(a) as a result of the amendment proposed by item 4 of Schedule 2 of the TSLA Bill.

[96]. The term concessional contribution is defined in sections 292-25 and 292-165 of the ITAA 1997. Examples of concessional contributions that will be eligible include superannuation guarantee contributions, notional taxed contributions, allocations from reserves that are concessional contributions and contributions an employer makes under a salary sacrifice arrangement.

[100]. B Shorten (Minister for Financial Services and Superannuation), Superannuation measures as part of the Mid-year economic and fiscal outlook, op. cit. This announcement also included an income test so that individuals who receive less than ten per cent of their income through employment or business will not be eligible which would have reduced coverage.

[124]. The term income for surcharge purposes is defined in section 995 of the ITAA 1997 and includes the person's taxable income (including the net amount on which the family trust distribution tax has been paid), reportable fringe benefits, reportable superannuation contributions and total net investment loss for the income year less any taxed component of a superannuation lump sum received, other than a death benefit, which does not exceed the taxpayer’s low rate cap.

[138]. The tax payable is set out in section 5 of the Superannuation (Departing Australia Superannuation Payments Tax) Act 2007. The text of the Superannuation (Departing Australia Superannuation Payments Tax) Act 2007 can be viewed at: http://www.comlaw.gov.au/Details/C2009C00137. The amount of the tax is nil for the tax free component of the departing Australia superannuation payment, 35 per cent for the element taxed in the fund of the taxable component of the departing Australia superannuation payment and 45 per cent for the element untaxed in the fund of the taxable component of the departing Australia superannuation payment.

[141]. These estimates do not include the impact of the 2012–13 budget measure to reduce the tax concession available for those earning more than $300 000 nor announcements in April 2013 to temporarily increase concessional contributions caps for those aged more than 50 and for a cap of $100,000 for the tax concession provided on fund earnings.

[148]. These concerns were given greater clarity by modelling exercises undertaken as part of the Intergenerational Reports conducted by the Treasury (2002, 2007 and 2010) and by the Productivity Commission in 2005 as part of its research report: Economic implications of an ageing Australia, Research report, Productivity Commission, 24 March2005, viewed 14 June 2013, http://www.pc.gov.au/__data/assets/pdf_file/0020/69401/ageing.pdf

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